Where are the buyers?

The homebuyer tax credit may be gone for all but certain military personnel, but we’re hearing from REALTORS® across the state who say first-timers are still in the market looking to take advantage of the highly affordable buyer’s market we’re in today.

Where are they finding buyers? Renters and young professionals are among the target markets mentioned in a recent Illinois REALTOR® Magazine story. Owning still beats renting over the long-term when you consider a typical homeowner’s net worth is 49 times that of a renter’s (according to the National Association of REALTORS® using data from the Federal Reserve Board). Good credit and staying within budget remain important factors for buyers seeking financing as lending requirements remain a challenge.

Younger buyers are expected to be key drivers for housing demand in the future as the children of the baby boomers (the echo boom) become first-time homebuyers. Considered the second largest generation in U.S. history totaling about 75 million born from 1982 to 1995, the oldest among them are entering the years when people typically buy a first home.

At the other end of the spectrum, the country’s estimated 78 million baby boomers remain in peak earning years and retirees represent a source of pent-up demand as many put their plans to downsize or head south on hold during the recent recession.

In the latest IAR Broker Sentiment Survey, brokers say they are working with more investors and cash buyers including foreclosure and short sale buyers. Nationally, distressed property sales in August made up 34 percent of the total sales and investors rose to a 21 percent market share (from 19 percent in July), as reported by the National Association of REALTORS®.